Residential Remortgages

What is remortgaging?

Remortgaging is when you get a new mortgage to pay off your existing one, and then switch over to paying off the new mortgage instead. This new mortgage is sometimes known as a ‘remortgage’.

You can also take out a mortgage against a property that you already own outright – either because you paid cash initially, or because you’ve paid off a previous mortgage. While this isn’t technically remortgaging, it is similar in that you’re not obtaining the mortgage in order to buy the property.

Remortgaging is different from moving home, when you get a new mortgage for the property you’re moving into. With a remortgage, you usually stay in the same property, and simply set up a new mortgage secured on it. So it’s a purely financial arrangement, and doesn’t have to be linked with moving house.

When can I remortgage?

Many people look at remortgaging when their current mortgage deal is coming to an end. Some of the best mortgage deals only last for two or five years, so you need to look at your options sooner rather than later.

You can still remortgage even if your current mortgage has some time to run, but you may have to pay an early repayment fee. These fees can be quite large – but it could still be worth your while to pay them if your remortgage deal will work out cheaper in the long run.

Why get a remortgage?

Remortgaging is a quick way to generate cash (or ‘capital’) from a property that you own, or already have a mortgage on.

The value of your property has probably risen since you bought it, and your personal circumstances may have changed too. If so, you’ll probably be able to get a remortgage for a larger amount than you could when you bought the property. That will leave you with money left over that you can use to carry out an extension or refurbishment to your home, or to finance another major purchase.

Another reason to remortgage is so you can shop around for a better deal. You may have chosen your original mortgage 10 or even 20 years ago, when the property and mortgage markets looked very different.

A new mortgage could offer you a better interest rate or more flexible payment terms than you can get from your current deal – particularly if your home has risen in value, so the new loan is for a smaller proportion of its price (the ‘loan-to-value’ or LTV ration). This can potentially save you thousands of pounds a year.

On top of that, you can use your remortgage capital to pay off your other debts – for example, on overdrafts, credit cards or store cards. This can save you even more money, as you get rid of lots of expensive, fragmented borrowings and roll them up into a single, cheaper and more manageable loan – perhaps with cash left over too.

Remortgages: questions to consider

• How much cash do you want to raise, and how much more will you need to borrow?
• What sort of terms are you looking for? For example, what options would you like in terms of payment holidays, early repayment and so on?
• If you’re looking for a repayment mortgage, how long will the term be? What ‘age and stage’ will you be at by the time the mortgage is paid off?
• Similarly, if you’re considering interest-only, how will you pay the mortgage off at the end of the term?

How we can help with your remortgage

If you’re thinking about remortgaging, talk to us first. We’ll search the market for the best remortgage deals out there, bringing you the ideal balance of flexibility and competitive terms.

Get in touch

To talk through your options for remortgaging, contact us now for a free, no- obligation chat.

^* - Subject to individual circumstances and underwriting / valuation assessment